Post Session: Quick Review

Indian equity benchmarks carried forward their northbound journey for another session on Friday and ended with a cut of around a percent. Buying in second half of the day, mainly pulled the markets higher with Nifty surpassing crucial 10,600 level. Markets started the session on an optimistic note as traders took support from Care Ratings’ report forecasting the country’s GDP growth to accelerate to 7.5 per cent this financial year, from 6.6 per cent in the last fiscal, on better performance from the industrial and agricultural sectors. The street was also finding support with Union Oil Minister Dharmendra Pradhan’s statement that the Centre is deliberating on an ‘immediate solution’ to deal with rising fuel prices.

Markets extended gains in second half of the day with traders taking support with capital market regulator Securities and Exchange Board of India (SEBI) allowing ‘omnibus’ trades at the Gujarat International Finance Tec-city (GIFT City), India’s only international financial service centre (IFSC). An omnibus structure allows an investor trade through a broker or service provider with confidentiality. Some support also came with a report stating that Banks’ credit increased by 12.64% to Rs 85,51,099 crore in the fortnight ended May 11, 2018 from Rs 75,90,941crore in the fortnight ended May 12, 2017. The report added that Banks’ deposits grew by 7.61 percent to Rs 1,13,92,165 crore in the fortnight ended May 11, 2018, compared with Rs 1,05,86,083 crore in the fortnight ended May 12, 2017.

On the global front, Asian markets were mixed after US President Donald Trump cancelled a planned meeting with North Korean leader Kim Jong Un. European markets were trading in green in early deals on Friday, after North Korea made good on its promise to demolish the country’s nuclear test site and said it’s still willing to talk with Washington, in response to Donald Trump’s abrupt decision to cancel a summit with the North’s leader, Kim Jong Un.

Back home, agriculture stocks were in focus on a report that India and the Netherlands are keen to further cooperate in the field of agriculture India and the Netherlands are keen to further cooperate in the field of agriculture and allied sectors. In scrip specific development, JMC Projects gained on getting nod to raise funds up to Rs 150 crore. Stocks related to retail sector was in limelight as a private report stated that the Indian retail sector has attracted Rs 1,000 crore private equity investment in the March 2018 quarter, taking the cumulative investment since 2015 to Rs 5,500 crore.

The BSE Sensex is ended at 34962.00, up by 298.89 points or 0.86% after trading in a range of 34700.52 and 34992.75. There were 24 stocks advancing against 7 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index gained 1.68%, while Small cap index was up by 1.21%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 3.20%, Metal up by 2.52%, Basic Materials up by 1.97%, Auto up by 1.87% and Utilities up by 1.75%, while Consumer Durables down by 0.29% was the lone losing index on BSE. (Provisional)

The top gainers on the Sensex were ONGC up by 4.44%, Tata Steel up by 3.50%, Yes Bank up by 2.95%, Adani Ports &SEZ up by 2.44% and Indusind Bank up by 2.29%. (Provisional)

On the flip side, Coal India down by 1.14%, ITC down by 1.00%, TCS down by 0.36%, SBI down by 0.19% and Power Grid down by 0.07% were the top losers. (Provisional)

Meanwhile, credit rating agency, Care Ratings in its latest report titled ‘Indian Economy Prognosis: 2018-19’ has forecasted that India’s gross domestic product (GDP) growth will accelerate to 7.5% in 2018-19, from 6.6% in the last fiscal. It added that the growth will be dependent on favorable monsoon, pick up in investment and increased private sector spending supported by continued government spending. However, it pointed out that some areas of concerns are headline inflation, lending rates, fiscal prudence, current account deficit (CAD) and exchange rates.

The rating agency estimated that CAD will widen up to 2.5% of GDP for FY19, from the 1.7% for the first nine months of FY18, due to wider trade deficit, an estimated slowdown in the portfolio flows and increased oil prices. It also expects that farm sector growth to inch up to 4%, from the 3% in the year-ago period, and industrial output growth to go up to 6%, from 4.3% in the previous year. Besides, it noticed that meeting the wider 3.3% target on the fiscal deficit will be difficult and adherence will depend on achievement of the Rs 80,000 crore divestment target, goods and services tax (GST) collections and tax receipts. 

On the inflation front, the report said that the consumer price inflation will go up to 5.5% for the fiscal, from the 3.6% in FY18, which may result in rate hikes of up to 0.50% by the inflation-focused Reserve Bank of India during the year. For the banking sector, it said that it will have an ‘upward bias’ with credit growth estimated to increase to 12% and deposits to expand by 10% and added that non-performing assets (NPAs) will be a major challenge for lenders.

Care Ratings has said that the estimates in the report have been made assuming that crude oil does not spiral over the present $80 per barrel and settles down at up to $75. It also said that the exchange rate will slip further to the 67-68 levels against the US dollar by the end of FY19 and added that the reserves will grow marginally to $435 billion, from $425 billion at present.

The CNX Nifty is ended at 10619.50, up by 105.65 points or 1.00% after trading in a range of 10524.00 and 10628.05. There were 41 stocks advancing against 9 stocks declining on the index. (Provisional)

The top gainers on Nifty were Hindalco up by 5.55%, Indian Oil Corp. up by 5.16%, Indiabulls Housing Finance up by 5.14%, ONGC up by 4.53% and HPCL up by 4.47%. (Provisional)

On the flip side, Bharti Infratel down by 1.13%, ITC down by 0.84%, Tech Mahindra down by 0.84%, Coal India down by 0.77% and TCS down by 0.43% were the top losers. (Provisional)

The European markets were trading in green; UK’s FTSE 100 increased 17.57 points or 0.23% to 7,734.31, France’s CAC surged 33.9 points or 0.61% to 5,582.35 and Germany’s DAX rose 126.55 points or 0.98% to 12,981.64.

Asian equity markets ended mixed on Friday after US President Donald Trump cancelled the planned historic summit with North Korean leader Kim Jong Un and oil prices eased amid signs that Russia is willing to gradually increase output. Chinese stocks closed lower to log their worst week in more than one month as trade worries persisted. Meanwhile, Japanese shares finished marginally higher as the yen slipped from a two-week high against the dollar after the release of weak inflation data.